On Tuesday (October 1st) during the Asian session, international oil prices fluctuated narrowly, with US crude oil currently trading around $68.26 per barrel. Oil prices fluctuated widely on Monday, but in the third quarter, they fell by 17%, as concerns about the expansion of the Middle East conflict potentially suppressing crude oil supply were overshadowed by concerns about weakened global demand.

The November Brent crude oil futures, which expire on Monday, fell 21 cents to close at $71.77 per barrel. Meanwhile, the more active December Brent crude oil futures rose 27 cents on Monday to $71.81.

This global indicator of oil prices fell by 9% in September, marking the largest monthly decline since November 2022. After falling for the third consecutive month, it plummeted by 17% in the third quarter, marking the largest quarterly decline in a year.

US crude oil futures fell 1 cent on Monday, closing at $68.17. The benchmark oil price in the United States fell by 7% in September, marking the largest monthly decline since October 2023, and fell by 16% in the third quarter, marking the largest quarterly decline since the third quarter of 2023.

On Monday, Iran, as an important oil producing country and member of the Organization of the Petroleum Exporting Countries (OPEC), may be directly involved in the expanding Middle East conflict, providing support for oil prices.

Since last week, Israel's attacks have escalated, killing Hezbollah and Hamas leaders in Lebanon and striking Houthi targets in Yemen. All three organizations have received support from Iran.

Matador Economics economist Tim Snyder said that the market is weighing whether the Middle East conflict will spread in the region.

The Lebanese army withdrew from the border with Israel on Monday evening, and Israel's ground invasion seemed imminent. A security source said that Israel attacked the southern suburbs of Beirut; About an hour after the Israeli military warned residents to evacuate the area near buildings in southern Beirut that reportedly had Hezbollah infrastructure, reporters witnessed a flash and heard a series of huge explosions. A US official who declined to be named said that the location of the Israeli military indicates that a ground invasion of Lebanon may be imminent.

As the world's second-largest economy and largest oil importer, major Asian countries announced last week the adoption of fiscal stimulus measures, but oil prices responded calmly to this.

Traders question whether these measures are sufficient to boost lower than expected demand in major Asian countries so far this year.

The data on Monday is not optimistic about demand, as it shows that manufacturing activity in major Asian countries has contracted for the fifth consecutive month, and the service industry has slowed significantly in September.

Oil prices remained stable on Tuesday as the prospect of additional supply entering the market amid sluggish global demand growth offset concerns that the escalation of the Middle East conflict could disrupt exports from major oil producing regions.

In the context of escalating tensions in the Middle East, traders have assessed the outlook and crude oil prices have remained relatively stable, "said an analyst from ANZ Bank in a report

They added. The risk of supply disruption in the Middle East is being offset by OPEC's prospects for increased production. Despite OPEC's efforts to stabilize the oil market, oil prices are still under pressure

Data released by the US Energy Information Administration (EIA) on Monday showed that US oil demand rose to its highest seasonal level since 2019 in July, while production declined for the second time in three months.

Compared to other major consumer countries such as Asian powers, the United States has shown greater resilience in oil demand this year, as those countries are experiencing sluggish demand under economic pressure.

The total oil consumption in the United States in July increased by 1.2% compared to June, reaching 20.48 million barrels per day, the highest value in July since 2019. The demand for gasoline and ultra-low sulfur diesel has reached its highest seasonal level since 2019, while the demand for aviation fuel is 1.83 million barrels per day, the highest level since August 2019.

Meanwhile, the oil production in the United States has slightly slowed down for the second time in three months. EIA data shows that the total US oil production in July decreased by 25000 barrels per day compared to June, to 13.205 million barrels per day.

Some oil analysts and investors have been monitoring signs of a slowdown in US production, as record high US supply and weak economic activity in major Asian countries have put heavy pressure on oil prices this year. According to EIA data, the monthly production in the United States reached a record high of 13.3 million barrels per day in December last year.

However, on Monday, Federal Reserve Chairman Powell's speech leaned towards hawkishness, helping the US dollar index rebound 0.3% from a low in over a year to close at 100.76, which exerted some pressure on oil prices.

On this trading day, the Eurozone September CPI data, the US September ISM Manufacturing PMI, the US August JOLTs job vacancy data, and the US API crude oil inventory series data will be released. Investors need to pay close attention to them; In addition, continue to pay attention to news related to the geopolitical situation.

From the daily chart, the rebound of US crude oil on Monday was suppressed by the 5-day moving average, and it is still below all moving averages. The KDJ dead cross is running, and the MACD red bar is shrinking. There is still further downside risk for short-term oil prices, and attention should be paid to the support near the low point of 66.95 on September 26th. Pay attention to the resistance at the 10 day moving average of 69.63 and the 70 integer level. If it can rise above the 70 level, it will weaken the bearish signal in the future.

(Continuous daily chart of US crude oil)

Russia claims that OPEC+is giving up oil market share from a long-term stability perspective

Russian Deputy Prime Minister Novak stated that the Organization of the Petroleum Exporting Countries (OPEC+) and its allies are strategically reducing oil supply and giving up market share from a long-term perspective, in order for producing countries to ensure sufficient investment while making oil prices suitable for both producing countries and consumers.

Novak said these words in an interview with Al Arabiya News; He provided interview records from September 28th in his office in Russia on Monday.

When asked if maintaining market share is more important than price, Novak replied that it is wrong to only consider the short term.

Yes, we may have deliberately taken action to temporarily lose market share, but we are not focusing on today, but on the future, "Novak said

Novak said, "It is important that the energy industry of the exporting country develops first so that investment can continue. Therefore, the price needs to satisfy both the exporting and importing countries, so as not to slow down the growth of demand. Therefore, the price should not be too high

According to the International Energy Agency (IEA), OPEC+'s market share has fallen to a historic low since 2022 due to production cuts and increased supply from the United States and other oil producing countries.

According to IEA data calculations, OPEC+'s oil production is equivalent to 48% of global supply.

OPEC+has agreed to postpone the originally planned gradual production increase from October to December and has stated that if necessary, the production increase plan can be further suspended or reversed.

OPEC+will hold a plenary meeting on December 1st to decide on policies. The Joint Ministerial Monitoring Committee (JMMC) of OPEC+will hold a meeting on October 2 to make recommendations on policy changes.

Novak also stated that the current oil price (averaging around $80 per barrel since the beginning of the year) is balanced and meets the needs of both consumers and producers.

He said that as geopolitical risks have been taken into account, he expects oil price fluctuations to weaken after the turbulence caused by the situation in the Middle East.